Market leaders as varied as Apple, IBM, Intuit, Kaiser Permanente, and Nike have used design thinking to gain a competitive advantage, applying it to create innovative products and services. Within an organization, design thinking is a tool for unlocking cultural change. It makes companies more flexible, more responsive to their customers, and ultimately, more successful.

What are the elements of design thinking?

Although the name and number of its key principles may vary depending on how you apply them, the basic elements of design thinking always include some variation on the following: researching and defining the problem, ideating, and prototyping and iterating.

Researching and defining the problem: Design thinking draws upon user-centered research techniques, including ethnographic analysis, for understanding customers and users. During the research phase of the design thinking process, the goal is to understand and empathize with the people for whom you’re designing.

Ideating: During the ideation phase of the design thinking process, the goal is to generate a large number of interesting ideas that represent potential solutions. Techniques for ideation may include sketching, brainstorming, and mind mapping to create high-level concepts.

Prototyping and iterating: Making ideas tangible is critical to the design thinking process, as are the iteration cycles required to test and refine those ideas. Design has a bias toward making things, and prototyping is the technique that pushes the making process forward. You’ll create prototypes for demonstrating and validating your basic designs that are based on the best concepts from your ideation exercises. To properly evaluate a design concept, you’ll want to prototype it in the same environment and context in which it will eventually function. Prototypes can be low or high fidelity, interactive or static. What matters is that the prototypes must convey the experience flow.

What are the benefits of applying design thinking?

By introducing different ways of problem solving and methods for discovering what people truly need, design thinking helps organizations change their cultures to become more customer centric and collaborative. While every company is different, useful metrics for assessing the impact of design thinking include: cultural measures, such as employee satisfaction, internal engagement, and efficiency; financial measures, such as sales and productivity; and product quality measures, such as customer satisfaction.

What is the value of design thinking? While the financials alone may paint an incomplete picture, it’s notable nonetheless that design-led companies, such as Apple, IBM, and Nike, outperform the overall market by a significant margin. According to the Design Management Institute’s Design Value Index Study, these companies beat the S&P 500 by 211% over a 10-year period.

Design thinking can enable better decision-making around the creation of products and services. Travis Lowdermilk, a senior UX designer at Microsoft, describes how his team used design thinking to bring a new perspective to the company’s Cloud and Enterprise division:

It's definitely about listening to our customers. We're doing a lot of user-centered design now, as every company is. … Understanding people and understanding their problems is a … core component to that, but then also having this rich, ongoing conversation with them to get as sharp of a picture as to the nuances of those problems, so that we can deliver a solution that's … right on point.

How do you apply design thinking?

Transforming into a design-centric company can be a long journey, but a necessary one if you want innovation to thrive within your organization.

How do you make that happen? Suzanne Pellican, vice president of experience design at Intuit, describes Intuit’s eight-year journey to become a design-focused company:

Because we invested in building innovation skills into our employee base, we are not only a design-thinking company—we're a design-driven company. Meaning, we’re going from creating a culture of design thinking to building a practice of design doing, where we relentlessly focus on nailing the end-to-end customer experience. This means that before anything gets built, the whole team—engineers, designers, marketers, product managers—are interfacing with the customers to ensure they understand the problem well, and together, they design the best solution.

Such culture change, of course, is never easy. In KPCB’s “Design in Tech Report 2016,” John Maeda outlines five factors that contribute to the perception of great design in companies: talent, investment, executive / board support, innovation, and strategy.

A design-centric culture begins by having a strategic intent and broad commitment from an organization’s senior leadership, including at the executive and board levels. In some ways, this is the most essential element, having leaders throughout a company that value design. Of course, with leadership on board, you’ll need talented designers to execute and drive the vision forward. And there’s no doubt that finding talent can be a challenge, whether you’re a startup or an enterprise.

Next, making a long-term investment in design infrastructure, training, and support across the organization is critical. If design thinking does not permeate an organization, it is all too easy for things to revert to business as usual, with everyone hidden away in their own silos instead of collaborating. To make design a driving force within a company, everyone—from executive leadership to engineering, marketing to sales—should receive training and coaching in design thinking, whether it be in-person workshops or online courses.

Successfully calibrating design thinking to your company’s needs is a great challenge in itself. But if you can do it, design will become a core competency that differentiates your organization and its products and services, with rewards that can be truly great.

Jonathan Follett is a Principal at Involution Studios where he is a leader of the firm’s emerging technologies practice, working with clients like Partners HealthCare, the Personal Genome Project, and Walgreens. His work has been featured in the Atlantic, Forbes, the Huffington Post, and Wired. Jon is an author of four books including “Designing for Emerging Technologies” (O’Reilly Media, 2014), which offers a glimpse into what future interactions and user experiences may look like for rapidly developing technologies — from genomics t...

M​ary Treseler is Vice President, Content Strategy at O’Reilly Media, ​where she leads an editorial team that covers a wide range of topics from Devops to design. Mary is chair of the Velocity Conference. She has been working on technical content for 25 years, acquiring and developing content in areas such as programming, software engineering, and product design. A Boston native, Mary lives​ oceanside​ ​in Padanaram, MA.